Sample (2006) – Modify with school district data as needed.
Review for current legal requirements.
Edited by J M Merrins, Ed.D.

REQUEST FOR PROPOSALS (RFP)
INTERNAL AUDITOR SERVICES

Overview

The [NAME} School District invites proposals from qualified individuals and accounting firms, hereinafter referred to as “Auditor,” to perform the internal audit function.

In accordance with the District’s policies and procedures, and New York State law, contracts for professional services requiring special skill or training are not subject to competitive bidding requirements of S103 of General Municipal Law.

1. Purpose

The District requests proposals from qualified individuals and accounting firms interested in providing internal audit functions for the school district. The internal audit function will be performed to ensure that the operating procedures including all internal controls are being followed and that all expenditures of school district funds are in accordance with laws, regulations, and district policy.

Proposal Submission
Proposals must be clearly labeled and submitted to [Name}, Superintendent of Schools [or other], [NAME] School District, [FULL ADDRESS], New York [ZIP] on or before 1:00 p.m. [or other] prevailing time, on [DAY, DATE]. There is no expressed or implied obligation for the District to reimburse responding individuals or firms for any expenses incurred in preparing quotations, attending pre-quotation conferences, or interview(s) in responding to this request. Proposals submitted after the stated time and date will not be considered and will be returned to the firm unopened.

2. Scope of the Audit

The special-purpose audit should be conducted in accordance with the following guidance, as applicable: the Statement on Auditing Standards (SAS) 54, Illegal Acts by Clients; SAS99, Consideration of Fraud in a Financial Statement Audit; Management Anti-fraud Programs and Controls (an attachment to SAS 99). This audit will evaluate the adequacy of the internal financial controls with emphasis on areas vulnerable to fraud and abuse; the adequacy of the School System’s current financial policies and procedures; and the adequacy of the District financial and auditing organizational structure. The auditor will make use of and build upon the internal control evaluation work done by the District’s independent CPA firm during that firm’s annual financial statement audit. The objectives of this engagement are:

  • Development of a risk assessment of the district’s financial operations, including, but not limited to; review of financial policies procedures and practices;
  • An annual review and update of the risk assessment;
  • Annual testing and evaluation of one or more areas of the district’s internal controls, taking into account risk, control weaknesses, size, and complexity of operations;
  • Preparation of reports which analyze significant risk assessment findings, recommend changes for strengthening internal controls and reducing identified risks, and specify time frames for implementation of such recommendations.

Areas that may be addressed include but are not necessarily limited to:

  • Certification of Payroll
  • Review of Bank Reconciliation and Treasurer’s Report
  • Payroll Observations
  • Review Check Signing Log
  • Fixed Asset Sampling
  • Perform Testing and Validation functions
    1. Make an independent selection of key controls for testing to assure that controls are appropriate and are effective when applied.
    2. Test the design and operating effectiveness of these internal controls to detect deficiencies.
  • Perform audit procedures designed to identify unusual and/or questionable transactions.
  • Monitor the internal controls of the school district.
    1. Review any recommendations regarding the internal controls with Business Office personnel and the Board of Education.
    2. Based upon the findings, assist the District in the design and implementation of recommended procedures to ensure the operating effectiveness of the internal control environment.
  • Report to the Audit Committee of the School District on a quarterly basis.

In the event the Internal Auditor believes that fraud and/or theft has been or may have been committed by any District employee, including but not limited to the Superintendent of Schools and the administrative staff, then he or she is to immediately notify the President of the Board of Education, who in turn will notify the whole Board. The whole Board will then review the information and take appropriate action.

An individual or firm can schedule an appointment prior to submission of any proposal to meet with [NAME], School Business Administrator, to review the scope of services provided to the District. Please contact the Business Office at [NUMBER] between the hours of 8:00 a.m. and 3:00 p.m. to schedule an appointment.

All proposals must be submitted in two parts. Part I must consist of responses to the management and qualifications items. Part II must consist of complete contract cost and pricing information. Incomplete submissions will not be considered for award. Proposals should not be excessively long, and should be submitted in a format that permits copying for review. Please provide seven (7) paper copies of each proposal, one copy titled “ORIGINAL” and the remainder titled “COPY,” and one copy in electronic format addressed to [E-MAIL ADDRESS]. Each page of the proposal must state the firm submitting the proposal, the fact that the RFP is being submitted to the District, and the page number. All materials submitted in response to this request for quotations shall become the property of the District.

PART I – Management and Qualifications

In setting forth its qualifications, each individual or firm submitting a proposal shall:

A. Provide evidence of an individuals credentials and qualifications in the area of
Internal auditing and if a firm be either a New York State licensed Certified Public
Accounting Firm, or a licensed Certified Public Accountant in accordance with the New
York State Education Department, Office of the Professions as a partner or officer of the
firm.

B. Describe the individual’s or firm’s experience and expertise focusing on internal controls.

C. State the name(s) of the officer(s) and associate(s) in the firm.

D. State the names and credentials of all partners, associates, and accountants that might be
assigned to this engagement and provide their resumes.

E. Identify the nature of any potential conflict of interest the individual or firm might have in
providing these services to the district.

F. Provide a comprehensive description of your approach to fulfilling the requirements of the RFP. For example, describe forensic auditing techniques, data analysis techniques, use of Information Technology (IT) specialists to perform IT assessments and other auditing
procedures, the type and extent of sampling to be employed, etc.

G. Provide a copy of the individual’s or firm’s latest peer review.

H. Provide any other information that might be beneficial to the District.

I. Provide a detailed schedule for completing the audit.

Part II – Cost

State the rates at which the services of all partners, managers, senior accountants, staff accountants, or other personnel that would be provided to the District. In addition, state which partners and/or staff are expected to perform the services. Please include:

A. For each partner, manager, or staff whose resume is provided, the regular hourly rate and the hourly rate you are quoting.

B. For each item in the “Scope of Audit,” include the estimated number of hours for each employee type.

C. The total cost for the engagement for a school fiscal year, including travel and other incidental costs.

D. Each proposal will clearly state the fees to be charged for the years ended:
June 30, 20__
June 30, 20__
June 30, 20__

E. Each proposal will clearly state the basis on which special audit or management services will be billed.

3. [NAME] School District Profile

Enrollment – [#] students K-12 (BEDS form – YEAR)
Board of Education – 9 members [or other] elected at large for 5-year [or other] terms
BOCES – component of the [NAME] Board of Cooperative Educational Services
Number of Employees – Approximately [#] employees (including full-time, part-time and substitutes).
Other Operations – The District operates its own student transportation [or other]
Budget and Federal Awards – The 20__-20__ approved general fund budget was $[#].
For the same timeframe, it has federal grants of approximately $[#]. The 20__-20__ approved general fund budget is $[#].
Pension Plans – SED certified staff has mandatory or optional membership in the New York State Teachers’ Retirement System (TRS). All other staff has mandatory or optional membership in the New York State & Local Retirement Systems (ERS).
Description of financial software programs – The District uses the [NAME] software for all financial accounting.

Accounting Funds: General Fund; Federal Special Aid Fund; School Lunch Fund; Debt Service Fund; Trust and Agency Fund; Capital Fund; Student Activity Fund

Checks Processed: A monthly average of [#] accounts payable vouchers and checks, for an annual total approximating $[#].

Payroll Checks:

  1. Approximately [#] paychecks per pay period
  2. Approximately [#] full-time employees
  3. Up to [#] part-time employees including hourly workers, tutors, summer help and substitutes
  4. Payroll processed every two weeks
  5. Approximately [#] checks annually

Purchasing:

  1. Approximately [#] purchase orders annually
  2. Cooperative Bids with [NAME] BOCES, [NAME] BOCES, [NAME] BOCES, as well as state contract purchases

4. Interview

The award process will include an interview with any or all of the district administration and Board of Education Audit Committee no later than the week of [FULL DATE].

5. Evaluation and Selection Process

A. Opening of Proposals – At the designated time and date, the Business Administrator shall open and list the proposals for the record. This is not a public opening. Responses received after [TIME] on [DAY, DATE], shall be returned unopened.

B. Evaluation – During the evaluation phase, proposals are reviewed by the Selection Committee to determine which proposals address all the requirements of the RFP, and to technically review the proposals. Proposals determined to be technically non-responsive or not as responsive as other proposals, are eliminated at this point.

6. Termination of Contract

Any contract agreed to under this Request for Proposal is subject to termination by either party with thirty (30) days written notice. In the event of termination of the contract, the District’s responsibility shall be to pay for unpaid services performed and authorized costs incurred by the Auditor. The District will have the right to review the contract annually.

7. Right to Reject Requests for Proposal

The District reserves the right to reject without prejudice any and all quotations received under this Request for Proposal.